“My advice is to get into real action for your real estate goals. Learn the information that you need to know about your specific financial situation and the ways you want to invest so you can start to get real estate properties under your belt.”
Did you know that 90% of millionaires build wealth through real estate? It's an incredibly powerful tool for building financial security, and I'm thrilled to share with you five simple, actionable steps to kickstart your real estate investing journey.
In this episode, I’ll guide you through getting financially prepared for an investment property, show you how to analyze potential properties effectively, discuss the importance of assembling a reliable team, and finally, reveal how to start making offers confidently.
If you've been considering real estate investing for a while, now is the time to turn those thoughts into reality. I’m here to help you step onto the court of your life and bring your real estate investment dreams to fruition. So, without further ado, let's dive in and equip you with the knowledge and tools to make your mark in real estate investing. Let's get started!
[00:00:57] Introduction to today’s topic: Buying your own real estate investment
[00:02:15] How to get ready for your real estate journey:
[00:02:25] Step #1: Establish a strong financial foundation for yourself and why it is important
[00:02:29] Money Mapping training as a budgeting tool
[00:06:15] Step #2: Explore real estate investing methods that suit your finances
[00:08:27] Step #3: Learn how to start analyzing deals
[00:10:11] Websites to check nearby real estate property
[00:14:10] Step #4: Assemble your real estate team
[00:15:01] Looking for an Austin realtor for investment properties? Contact Craig& I
[00:17:02] Step #5: Stop thinking about it and start doing it
[00:19:13] Holistic Money Podcast outro
Notable Quotes
Before you go and take more risks and start investing your money to make money through real estate investing, you want to ensure that you have a stronghold and handle your personal finances. You want to make sure that you've already developed some great habits with money, like you have a great financial management system that you like to use.
Ultimately, it comes down to looking at your specific financial situation, where you are, the amount of cash you have, the amount of money you can borrow, and then the amount of work you want to put into the property. That's a big consideration as well.
For those that are new to real estate investing, consider getting a home that's in pretty good shape, one that isn't going to need a new roof or water heater or isn't in bad condition so that you don't have to plan for a lot of maintenance and repairs for the future. But you must start to think about when you need to replace the roof next, or how old the water heater is, or what condition the floors are in because these are going to be expenses that you have to put into the property later on, to make sure that you keep it up-to-date and f
Apply here to be featured on the "Behind Closed Wallets" Series of the Holistic Money Podcast
“My advice is to get into real action for your real estate goals. Learn the information that you need to know about your specific financial situation and the ways you want to invest so you can start to get real estate properties under your belt.”
Did you know that 90% of millionaires build wealth through real estate? It's an incredibly powerful tool for building financial security, and I'm thrilled to share with you five simple, actionable steps to kickstart your real estate investing journey.
In this episode, I’ll guide you through getting financially prepared for an investment property, show you how to analyze potential properties effectively, discuss the importance of assembling a reliable team, and finally, reveal how to start making offers confidently.
If you've been considering real estate investing for a while, now is the time to turn those thoughts into reality. I’m here to help you step onto the court of your life and bring your real estate investment dreams to fruition. So, without further ado, let's dive in and equip you with the knowledge and tools to make your mark in real estate investing. Let's get started!
[00:00:57] Introduction to today’s topic: Buying your own real estate investment
[00:02:15] How to get ready for your real estate journey:
[00:02:25] Step #1: Establish a strong financial foundation for yourself and why it is important
[00:02:29] Money Mapping training as a budgeting tool
[00:06:15] Step #2: Explore real estate investing methods that suit your finances
[00:08:27] Step #3: Learn how to start analyzing deals
[00:10:11] Websites to check nearby real estate property
[00:14:10] Step #4: Assemble your real estate team
[00:15:01] Looking for an Austin realtor for investment properties? Contact Craig& I
[00:17:02] Step #5: Stop thinking about it and start doing it
[00:19:13] Holistic Money Podcast outro
Notable Quotes
Before you go and take more risks and start investing your money to make money through real estate investing, you want to ensure that you have a stronghold and handle your personal finances. You want to make sure that you've already developed some great habits with money, like you have a great financial management system that you like to use.
Ultimately, it comes down to looking at your specific financial situation, where you are, the amount of cash you have, the amount of money you can borrow, and then the amount of work you want to put into the property. That's a big consideration as well.
For those that are new to real estate investing, consider getting a home that's in pretty good shape, one that isn't going to need a new roof or water heater or isn't in bad condition so that you don't have to plan for a lot of maintenance and repairs for the future. But you must start to think about when you need to replace the roof next, or how old the water heater is, or what condition the floors are in because these are going to be expenses that you have to put into the property later on, to make sure that you keep it up-to-date and f
Apply here to be featured on the "Behind Closed Wallets" Series of the Holistic Money Podcast
Hello and welcome to the Holistic Money Podcast. I'm your host, certified financial planner and money mindset coach, Whitney Morrison. Over the past seven years, I've taken myself from credit card debt and no savings to a seven figure net worth. I did this without a budget or a restrictive money plan, but instead smart, sustainable wealth building strategies combined with changing my relationship with money. In this podcast, you'll learn the ins and outs of my no budget philosophy, practical wealth building strategies, and key mindset shifts to make it happen. There is no shortage of information out there to tell you what to do with money, but teaching you how to think and feel about money, that's my secret sauce. If you've been waiting for a podcast that gives you actionable strategies to not only build wealth, but also feel really good while you're doing it, then you're in the right place. Let's get started. Hello and welcome back to the Holistic Money Podcast. In today's episode, I'm gonna talk to you about real estate investing, specifically how you can get started buying your first real estate investment property. I heard a very interesting statistic the other day that said, 90% of millionaires were created through real estate investing. So given that this is such a powerful wealth building tool, I wanted to create an episode specifically giving you five very simple, digestible steps for you to get started on your real estate investing. Journey. I'm gonna tell you how to get financially prepared for an investment property, how to analyze properties, how to assemble your team, and lastly, how to get out there and start putting in offers.'cause I know a lot of you have been thinking and talking about real estate investing for a long time, but I'm gonna teach you how to get on the court of your life and actually bring your real estate investing goals from dreamland to reality land. So without further ado, let's get started.
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The first thing that you wanna do in order to get prepared for your real estate investing journey is you want to establish a strong financial foundation for yourself. And there are two main reasons why you wanna do this. Number one is because before you go and take more risk, And start to invest your money to make money through real estate investing. You wanna make sure that you have a strong hold and handle over your personal finances. You wanna make sure that you've already developed some really great habits with money, like you have a great financial management system that you like to use. are not a budgeter, Check out my free Money Map training. This is the money management system that I use personally in my life and I've used in hundreds of my client's life to a much better relationship with managing money and actually have and invest each month. So if you don't have a system that works for you, definitely check out my Free Money Map training. But if you do have a system that's wonderful, but you just wanna make sure
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that you've
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established a strong foundation for your finances before you go and take on more risks with your money. The second reason is because when you're buying investment properties, you're likely gonna have to borrow money. And in order to borrow money, you want to be a strong contender for lending. And in order to be a strong contender to get lending, you have to make sure, first and foremost, that you have a strong credit score. Lenders traditionally look for a credit score of seven 40. And above that it's considered excellent credit. That doesn't mean that you won't qualify for a loan. If you have a credit score under seven 40, however, the loan terms will start to deteriorate. Lower your credit, you'll get less ideal interest rates, more fees associated with your loan, the low at your credit score. So. The next thing that you wanna do is you wanna make sure you have a low debt to income ratio lenders like to look for a debt to income ratio of below 36%. The way that you can calculate your debt to income ratio is you can add up all of your monthly minimum debt payments. So think any mortgage payments that you may currently have, minimum credit card payments, student loan payments, you can add up the total amount of those payments and divide that by your monthly income. It's gonna show a lender how much of your current monthly income is actually going towards debt, so they can assess whether
or not you will
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be a good investment to give money to, to see whether or not you're gonna be able to actually pay it back. The next thing that lenders will look for is stable income, having a W two job when it comes to real estate investing can be hugely beneficial because lenders will want to see some kind of consistency in your income. But for those of you that are entrepreneurs, do not freak out. You can still get lending as an entrepreneur, you just may have to jump through a few more hurdles. Specifically, you have to make sure that you have at least two years of tax returns showing that your business is making money. If you don't have that yet, then traditional lending like going to a bank, may not be your best lending options. However, that doesn't mean you're out of account for real estate investing. There are other ways that you can get money for these properties,
This is where you may have to look into more creative lending strategies out there. That's not something that I'm going to dive into in this episode, but I will be doing an episode in the next few weeks. On creative Linden strategies for entrepreneurs.
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The next reason why establishing a strong foundation is so important is because in order for you to qualify for lending, you're gonna likely have to have a down payment saved. You're gonna have to have some money that you're gonna be able to put towards a property. Now, depending upon which strategy that you use to buy your first investment property, it'll determine whether or not you need to put 3, 5, 10, 15, 20% down on a home. Which can significantly shift the amount of money that you actually have to have saved. But for just step one, I wanna make sure that you do have a savings plan. You're putting money into that down payment fund so that you can get started on your path to getting your first investment property.
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Step number two is to do your research on all the different ways that you can get started real estate investing, and find a way that makes the most sense for you in your current financial situation. For example, the way that I got started in real estate investing is I turned my primary residences, which were homes that I lived in for a year to a year and a half into a rental property. After I moved out and bought another home for myself, and this is a strategy I used three different times to acquire my properties. The reason why I loved this as an avenue for real estate investing is for a couple reasons. Number one, when you apply for a conventional mortgage on a primary residence, you tend to get lower interest rates and lower fees and additionally, you can also have a lower down payment anywhere from three to 5% down on the property. Now, when you just go and decide that you're gonna buy a real estate investment property, and that's the primary purpose of this property, you're looking at a different kind of loan. And this loan traditionally has a higher interest rate. You also have to put at least 20 to 25% down, which can be a bit of a barrier to entry into getting your first investment property. So you wanna do a little research at All the different ways that you can get started. Real estate investing. Another way is flipping real estate. I know this is something that a lot of people have had a lot of success at Buying a home that needs renovations, renovating the home, and then reselling the home for a profit. Using that profit to buy your next rental property, you can partner with other investors to buy your first real estate property. You can do short-term rentals, long-term rentals. Ultimately, what it comes down to is looking at your specific financial situation, where you are, the amount of cash that you have, the amount of money that you can borrow, and then the amount of work that you actually wanna put into the property. That's a big consideration as well. Do you want to flip a property? Do you have experience doing that? Do you have Contacts with general contractors and people that can help you do those flips, or are you looking for a home that's in relatively good shape, but that you can just start renting out immediately? These are all things that you wanna consider. as you're starting to look for properties.
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the Third thing that you wanna do, and perhaps one of the most important things that you can learn how to do as a real estate investor in, is to learn how to start analyzing deals. This does not have to be a super complicated thing that you're doing. All we are looking for is positive cash flow and a positive yield. On the cash that you're putting into the property. There's a very simple calculator that I use that helps me determine whether or not I consider a deal to be a good deal or not. Going through this calculator and running these numbers can really help you start to also. Explore all of the different real estate investing strategies out there. So the first thing that I look at when I'm looking at any property is I wanna look at how much expected rent that I can get off the property. And the amount of rent that I can get off of the property is dependent on how I'm gonna rent it out, right? Am I gonna rent it out as a long-term investment and I, am I gonna rent it out as a short-term rental on Airbnb? Am I gonna rent it out as a midterm rental to travel nurses that's fully furnished? Those are three different ways that you can actually rent out this property. And the rents are different for each of those different strategies. So it's really great for you to understand, okay, how much money can I get off of this and how can I get the most money out of this, given where this property is located? How Often people are coming to the area. Is there a hospital nearby? How One of the main strategies that I use for my rentals is a midterm investing strategy. I rent to traveling nurses. They tend to pay a premium for rental properties simply because they need something for a short amount of time. They need flexibility somewhere from three to six months. They want it fully furnished. So this is the strategy that I've chosen for all of my rentals, and it helps me. Get positive cash flow.
Now this may require that you do a little bit of research on your end, but Realtor. com can show you what current long term rentals are renting for in the neighborhood that you're looking at buying in. If you're going to do a short term strategy, You can go to Airbnb and see what nightly rates are for rentals that are nearby. Or if you're looking for that midterm strategy, you can go to furnishfinder. com. That's where I list my properties and you can start to get a sense for what similar properties to the one you're looking at are actually making money. but you will have to do a little research for me. I actually love doing it. It doesn't take a lot of time, but you're just going to have to get comfortable with starting to look up different information and starting to get a sense for how much the property could make.
after I understand how much the property is going to make me, I want to start to look at how much the property is going to cost. The first thing that I want to look at is the projected mortgage. So how much I'm going to be paying in principle and interest, as well as my insurance. When you are buying a rental property, you have to have a slightly different insurance, which can be a bit more expensive than primary residence insurance. The next thing I like to look at is if there are any HOA fees, if you are investing in a condo, for example, then you can likely expect that you're going to be paying monthly HOA fees. Now you may not have to pay maintenance fees and lawn fees in the event that you have an HOA fee. So you want to make sure and weigh that out. The next thing I want to look at is property taxes. If you live in Texas, then you know that property taxes are a big expense for real estate investors and just people that live in the state in general, you want to go to your local tax assessor and you want to understand what percentage of property taxes you can expect to pay and absolutely factor that into your calculations. Another thing that you want to consider is any property management fees. So for those of you that really want your real estate investments to be completely passive, you are going to have to hire a property management company. This is not something that I have done. On any of my units and I have six units currently and my husband and I manage them all ourselves We do hire a cleaner for each of our properties That flips our properties for us whenever we have new tenants come in or whenever we have new arrivals at our short term rentals So we do take those costs into consideration but if you want a property manager, you can expect to at least pay about 20% of your gross income to a property management company for them to take care of all of the maintenance, all of the incidentals in the property. They'll also take care of toiletries and any of the little items that you like to have in your home. So there are some things you don't have to pay for when you have a property management company, but you do wanna factor that in as you start to look at your numbers. The last thing that you wanna plan for is maintenance and repairs. And for those of you that are new to real estate investing, this is where I suggest you consider getting a home That's. It's in pretty good shape, one that isn't going to need a new roof or water heater or isn't in bad condition so that you don't have to plan for a lot of maintenance and repairs for the future. But it is really important that you start to think about when you need to replace the roof next or how old the water heater is or what condition the floors are in because these are going to be expenses that you have to put into the property later on to make sure that you keep it up to date and functional for people to actually live in.
So after I have my income and my expenses, I like to look at what my monthly projected cash flow is. And then I like to annualize that by multiplying that by 12. And then I like to see what the yield on the cash that I'm putting into the property is going to be, given that this is the amount of cash flow that I can expect to make off the property. And the way that you calculate that is very straightforward and simple. You simply divide the amount of annual cash flow that you plan to make on the property by the amount of cash invested, and that's going to help you see your yield I like to look for a yield somewhere between 5 to 6%, however, the higher the better.
When it comes to real estate investing, analyzing the numbers is one of the most important things that you can learn how to do. The numbers truly do not lie, and they can help you make a great decision on buying your first real estate investment property.
Step number four is to assemble your real estate team. Now that you have established a strong financial foundation, you've done some research on how to get it into the market. You've started to analyze deals. You want to start to assemble a team of professionals to help you actually bring your real estate goals to life. The first thing that you need is a great realtor. You need to find someone that has experience in investment properties so that they can help you understand what you want to look for in a home to make it a great cashflowing property for you. The mindset of this kind of realtor is going to be very different than the mindset of a realtor that specializes in first time homebuyers or luxury real estate or vacation properties. This realtor is going to have a different mindset and a different set of qualifications that they're going to look for to make sure that you are in a property that's going to cash flow and be a great investment for your future. For those of you that are in Austin and are looking for a great realtor to help you find your next investment property, that's going to help you cash flow. This is actually something that my husband and I do together. My husband is a realtor. We have a lot of experience in investing and creative ways to make your properties make money. So if this is something that you are interested in, make sure to reach out to me and we could set up a time to chat about your investing goals and see if my husband and I might be able to help you. The next thing that you want to do is find a lender. A lender can help you understand how much home you can afford to buy. Buy, they can help you understand your lending options. They can run numbers for you to help you really understand your investments as well. Another person you're going to need on your team is a great insurance professional. So somebody that can help you mitigate the risk for your investment property. And this is something that I can't stress enough. Seeing a lot of investors get themselves into really bad situations with their rental property simply because they didn't have great insurance. You want to make sure that you have great insurance in the event that a renter destroys inside of the property or steals property from inside of the home or a fire or a flood. Do not be afraid to ask your insurance professional all kinds of questions about what happens if X, Y, and Z happens in my home. So you understand specifically how your insurance works and you want to make sure that you get these answers to these questions in writing. The next thing you want to have on your team is a general contractor. This is for those of you that plan to buy a home and make updates to the property before you rent it out or before you flip it. Finding a great general contractor is something that a lot of people seem to complain about online and have a very difficult time doing. For me personally, I have found that it's been pretty simple. I have just done word of mouth referrals from friends that have experience with good general contractors and I've had great experiences at finding general contractors that I thought were affordable and do great work. The next thing you want to do is look for a property management company. You can easily find a company online or ask any of your real estate investing friends for referrals.
Step number five and probably the most important step in this video is to stop thinking about it and start doing it. Start to take real action towards your real estate investing goals by following this step by step process, making sure to build your credit, getting that down payment saved, understanding the different ways that you can get into the market. Analyzing deals, talking to a lender. You can start all of these things as soon as today. So you have a good sense of exactly what you need to do in order to get into your first real estate investment property. One thing that my husband and I started doing on our path to real estate investing is we started just making offers on a bunch of different houses. Do not be afraid. To start looking around, start making offers on properties. Just because you put an offer on a property does not mean A, the seller is going to accept the property. It doesn't mean B, that if they do accept the property, that you have to go under contract for the property. And then C, if you do go under contract for the property, you have an option period. Where you can back out of the contract within a specific amount of days in the event that you discover something that makes it not a great investment for you. So my advice for all of you is to start to get into real action for your real estate goals. Start to learn, the information that you need to know about your specific financial situation, about the ways that you want to invest. So you can start to get real estate properties under your belt. Like I said, at the beginning of this video, 90% of millionaires are created through real estate investing. This is one of the most lucrative paths to wealth building, especially for those of you that don't expect to have multimillion dollar businesses or have an income over half a million to a million dollars. This is the next most likely way that you're going to experience financial freedom and have cashflow in your life. So stop thinking about it. Start doing it. Real estate investing is not rocket science. As long as you're willing to put in a little bit of work, get a little creative on how these properties can make money, how you can market and sell them. Then you can absolutely start to be successful as a real estate investor, start to build your portfolio and experience. Real financial freedom in your life. All right, everyone. I hope you have a great week. I will see you in the next episode. Have you ever built a budget, but within weeks felt exhausted by the spreadsheets, the upkeep or the restrictive spending categories? If so, you are not alone. Budgeting has never worked for me, so I created a new way, money mapping. Money mapping has all of the things you need to be successful in your wealth building journey. It's simple, organized, and automated, but most importantly, it offers a completely new way to relate to money and manage it in your life. If you're ready to kick off your no budget strategy for building wealth, sign up for my free money map training at www. holistic money. com forward slash money map. Here's to building wealth with ease.